However, the district court orders in the Nehmer litigation create an exception to the generally applicable
rules in 38 U.S.C. 5110(g) and 38 CFR 3.114, and require VA to assign retroactive effective dates for certain awards of disability
compensation and DIC that are based on VA's regulations under the Agent Orange Act of 1991, Pub. L. 102-4. This exception
applies only to claims by members of the Nehmer class. VA is required to comply with the district court's orders, which have
been affirmed by the United States Court of Appeals for the Ninth Circuit to the extent they were appealed. Accordingly, we
propose to issue a regulation explaining the requirements established by those orders to ensure timely and consistent adjudication
under those orders without further need for special instructions.
The Nehmer court orders also require that, if an individual was entitled to retroactive benefits as a result of the
court orders but died prior to receiving such payment, VA must pay the entire amount of such retroactive payments to the veteran's
estate, without regard to statutory limits on payment of benefits following a beneficiary's death. Section 5121(a) of title
38, United States Code, provides that, when VA benefits remain due and unpaid at the time of a beneficiary's death, VA may
pay to certain survivors only the portion of such benefits that accrued during the two-year period preceding death. Current
VA regulations reflect the requirements of section 5121(a), and contain no exception for cases covered by the Nehmer court
orders. Because the conflict between current regulations and the Nehmer court orders may create confusion, we propose to amend
our regulations to reflect the requirements of the Nehmer court orders. Accordingly, we propose to issue rules reflecting
the limited exception to section 5121(a) established by the Nehmer court orders. This exception applies only to certain benefits
for members of the Nehmer class. As stated above, the intent of this rule is to ensure timely and consistent compliance with
the court's orders without the need for further special instructions.
The Nehmer Litigation
The
Nehmer litigation was initiated in 1986 to challenge a VA regulation, former 38 CFR 3.311a (which has since been rescinded)
that stated, among other things, that chloracne was the only disease shown by sound medical and scientific evidence to be
associated with herbicide exposure. In 1987, the district court certified the case as a class action on behalf of all Vietnam
veterans and their survivors who had been denied VA benefits for a condition allegedly associated with herbicide exposure
or who would be eligible to file a claim for such benefits in the future. In an order issued on May 3, 1989, the court invalidated
the portion of the regulation providing that no condition other than chloracne was associated with herbicide exposure and
voided all VA decisions denying benefit claims under that portion of the regulation. Nehmer v. United States Veterans' Admin.,
712 F. Supp. 1404 (N.D. Cal. 1989).
After Congress enacted the Agent Orange Act of 1991, Pub. L. 102-4, VA and the plaintiff class in Nehmer entered into
a stipulation to address remedial issues resulting from the May 1989 order. The stipulation provided that VA would not deny
any claims of the Nehmer class members until VA had acted on the first NAS report issued under the Agent Orange Act of 1991,
Pub. L. 102-4. The stipulation further stated that, once VA issued regulations establishing a presumption of service connection
for any disease pursuant to the Act, VA would readjudicate all claims for any such disease in which a prior denial had been
voided by the district court's May 3, 1989 order and would adjudicate all similar claims filed after May 3, 1989. The stipulation
stated that, if benefits were granted upon readjudication of a claim where a prior denial was voided, the effective date of
the benefit award would be the date VA received the claim underlying the voided decision or the date the disability arose
or the death occurred, whichever was later. In claims filed after May 3, 1989, the stipulation stated that the effective date
of any benefits awarded would be the date VA received the claim or the date the disability arose or the death occurred, whichever
was later. The district court incorporated the stipulation in a final order.
On October 15, 1991, VA issued a regulation establishing a presumption of service connection for soft-tissue sarcomas
based on herbicide exposure. On February 6, 1991, the Agent Orange Act of 1991, Pub. L. 102-4, established statutory presumptions
of service connection for non-Hodgkin's lymphoma, soft-tissue sarcomas, and chloracne. In June 1993, VA received the first
NAS report under the Agent Orange Act of 1991. Thereafter, VA issued regulations establishing presumptions of service connection
for four additional diseases (Hodgkin's disease, February 3, 1994; porphyria cutanea tarda, February 3, 1994; respiratory
cancers, June 9, 1994; multiple myeloma, June 9, 1994). In 1994, VA began to readjudicate the claims where a prior denial
had been voided by the 1989 court order and to adjudicate claims filed subsequent to that order. In cases where VA granted
benefits upon such readjudication or adjudication, it assigned effective dates as required by the Nehmer stipulation and order,
even though the effective dates in many cases were earlier than the effective dates of the statute or liberalizing regulations
that authorized the awards.
